How Property Disclosures Protect You
While property disclosure statements are the responsibility of the seller in a home buying transaction and provide critical information to the buyer, property disclosures protect both the seller and the buyer. We’ll be looking at why they are important and how to use them to your advantage.
Property Disclosures for Buyers vs Sellers
A property disclosure, combined with a home inspection, is intended to give the buyer a full, clear, and thorough picture of a home’s condition before they buy. Items disclosed in the property disclosure can be further examined during the home inspection. The home inspection can also discover new problems the sellers weren’t aware of. For the buyer, the property disclosure helps them make sure they are truly getting the house they want and fully prepares them to take on ownership. No house is perfect, so being aware of the problems means buyers are in a better position to take care of problems or work to prevent them.
For sellers, property disclosures protect them from being sued later down the line if the buyer discovers a problem with the house they didn’t know about. While there may the temptation to leave things out on the property disclosure, for sellers, honesty truly is the best policy, as the truth about a house will probably get out at some point.
Property disclosures differ from state-to-state and knowing what is on your state’s disclosure form can give you a better picture of what you should be aware of for your house, especially if you’re moving to a different state. For example, California requires special documentation if a property is located in an area prone to flooding, forest fires, or earthquakes. If the state is a “buyers beware” state, little to no disclosure is required from the seller. In a situation like this, a home inspection is especially crucial for the buyer.
What if the property disclosure is worrisome?
If the buyer encounters something worrisome on the disclosure that the seller can’t explain, there are several courses of action. First, continue with the home inspection to confirm the problem. Two, renegotiate with the seller to lower the price of the house or see if they will pay to fix the problem. Or three, back out entirely, and the buyer can keep their earnest money deposit. But the seller is only responsible for disclosing things they know about, meaning there may be problems that have genuinely been overlooked, which again, is why the home inspection is necessary.
As you can see, property disclosures are an opportunity for both the seller and buyer to make the transaction go smoothly and benefit both parties.
Sources
https://www.sold.com/real-estate-tips-advice/state-by-state-guide-to-real-estate-forms
